Interest Rate


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Interest Rate

 

the rate of interest for loaning money, the ratio of the amount of income from a loan to the total loan.

In precapitalist formations, usurious credit was the basic form of credit, and if no special legislative restriction existed in a country, the interest rate had virtually no limit. Under capitalism, the interest rate fluctuates within the average profit rate, depending on the supply and demand for loan capital. Nowadays, it is also influenced by inflation processes, international flows of capital, the state-monopoly regulation of credit, and other factors. Under socialism, the interest rate is set by the state in a planned manner and is not subject to spontaneous fluctuations.

References in periodicals archive ?
The Bank of Japan undertook drastic steps to lower interest rates to save domestic banks and non-financial companies after Japan's bubble burst.
Miller's plan to halve the interest rate on student loans would apply only to the subsidized loans, which last year accounted for 5.
James Grant is a columnist for Forbes and the editor (since 1983) of the financial advice newsletter Grant's Interest Rate Observer.
Pay off lower interest rate debts in order based on the after-tax interest rate.
Given the current interest rate environment, I think long-term bonds are not a good choice," says Stephanie Hancock, financial planner and owner of Hancock Wealth Advisory in Los Angeles.
Consider refinancing as well, but early payment penalties may negate the savings of a lower interest rate.
For those buyers, Gumbinger suggests hybrid adjustable-rate mortgages (ARMs), which feature a fixed interest rate usually for three, five, seven, or 10 years until they turn into traditional adjustable-rate mortgages.
The trio of experts outlined five things skittish investors should keep in mind about bonds and real estate as interest rates start edging up.
Since we are interested in a monthly payment, both the interest rate and loan term should be expressed in months.
Higher interest rates could decrease demand for insured municipal paper by causing risk-averse individual investors to invest a greater percentage of their money in federally insured bank deposits.
Although Freddie Mac obtained its amortizable basis in the favorable financing intangible under a specific DRA provision that subjected the institution to Federal income tax, the Tax Court's holding in this case will apply broadly to any purchaser of assets that assumes the seller's existing debt with a below-market interest rate.
We studied it, ran the numbers, and, in the end, we liked the comparative interest rate savings we could achieve.